One-year extension proposed despite 99.8pc completion

The commencement of commercial operations of the Hazrat Shahjalal International Airport's (HSIA) third terminal is facing unusual delays due to emerging risks during the testing phase and poor coordination between the Civil Aviation Authority of Bangladesh (CAAB) and Biman Bangladesh Airlines.

The delay is happening despite 99.80 per cent completion of the project.

The Ministry of Civil Aviation and Tourism has requested a one-year extension of the project until June next year without any increase in the total cost, according to an inspection report by the Implementation Monitoring and Evaluation Division (IMED) under the planning ministry.

A joint inspection by IMED Secretary Md Kamal Uddin and Director General Md Mahbubur Rahman revealed shortcomings in project monitoring, which led to inadequate identification of risks during both formulation and implementation phases.

The report expressed concern over leaving the infrastructure, officially inaugurated in October 2023, idle but recommended extending the project tenure, subject to complying with certain conditions.

The IMED secretary told The Financial Express there has been a lack of coordination between CAAB and Biman.

Biman has demanded $50,000 for software compatibility between its systems and those developed by the project office, he said.

"Although both entities operate under the same ministry, no concrete steps have been taken to address the issue, which could have been resolved earlier with ministerial interventions," he added.

Officials said the project was launched in July 2016 to address growing passenger and cargo demand at HSIA through the expansion of facilities that align with international safety and security standards.

The initial estimated cost was Tk 136.10 billion, with Tk 112.21 billion financed through a Japan International Cooperation Agency (JICA) loan.

Although the project was initially scheduled for completion by June 2022, its tenure was extended by three years to June 2025, with the revised cost rising to Tk 213.99 billion, 57.23 per cent higher than the original estimate.

Approval of the latest extension would mean the project will take a total of 10 years to complete - four years longer than the original six-year time frame.

Till May 2025, the project recorded 86.45 per cent financial progress, with the completion of 86.64 per cent of JICA-financed work, and 99.80 per cent overall physical progress, said a letter sent to the IMED and Physical Infrastructure Division of the Planning Commission.

The letter also highlighted that major infrastructural components, including the third passenger terminal, import-export cargo complexes, multilevel car parking, check-in counters, and other modern amenities, have been completed.

The terminal building construction is finished, while testing, commissioning, and site training of the installed equipment and systems are currently underway, it added.

However, the customs-installed scanning machines remain pending.

Officials said disputes have arisen among the contractor, CAAB, and the consulting firm over the testing and commissioning of equipment, trial operations, valuation of variations, and claims under the project.

A dispute board has been formed in this regard and proceedings have begun.

However, resolving the financial issues through the dispute board and subsequent arbitration is expected to take six to 12 months, the letter said while justifying the extension proposal.

The IMED report stated that the contingency service cost limit was initially set at Tk 5.51 billion in the original project, which was later increased to Tk 7.71 billion in the revised stage. The proposed revision seeks to raise this further to Tk 11.74 billion.

jahid.rn@gmail.com